Wednesday, June 19, 2013 — Partly Cloudy 16°C
City

Feeding Frenzy: House in The Beach Goes for $600K Over Asking Price

Posted by Andrew / July 26, 2007

15 Comments

pigeons590.jpgA house on Munro Park in The Beach with an asking price of $1.3M recently sold for an incredible $1.9M - roughly $600,000 over the asking price. The event set off a bit of a media storm as everyone from 680 News to CTV to The Financial Post covered the story this week. 680 News even called me to weigh in on the issue.

It's becoming the year of the bidding war as the Toronto Real Estate Market isn't showing any signs of slowing down any time soon. The summer months of July and August are traditionally a slow time of year in Real Estate-but not this year. Properties are regularly selling for over their asking price all over the city and the idea of getting a bargain has become like the quest for the Holy Grail.

--

The people most affected by all this-prospective buyers-are getting fed up. Some are relieving their frustration by acting irrationally and they end up overpaying for a property just for the sake of buying something. Others are packing it in and deciding to rent and wait for the market to cool off. And still others are starting to call for reforms and greater transparency for the entire multiple offer process. I for one welcome the idea of reviewing the process in the hopes of increasing a sense of fairness and transparency for buyers and sellers alike.

Photo by Eyeline-Imagery from the blogTO Flickr Pool.

Discussion

15 Comments

Sort By Oldest First / Newest First

Subscribe

John Pasalis / July 26, 2007 at 08:50 pm
user-pic
<p>I don&#39;t think it&#39;s the bidding war that most home buyers have a problem with.&nbsp; It&#39;s the way in which agents (I too am one) conduct bidding wars.</p><p>The lack of transparency in the multiple offer process is what drives home buyer anxiety.</p><p>The status quo is no longer acceptable with today&#39;s home buyers.&nbsp; Today&#39;s consumers expect honest, timely and open communication from the businesses they deal with.&nbsp; The longer the real estate industry takes to make this process more transparent the less relevant real estate agents become.</p>
Reply
Chris Orbz / July 27, 2007 at 12:41 am
user-pic
It seems like everyone&#39;s been waiting on this market to hit it&#39;s imminent cool-off for a long time now.&nbsp; Maybe I&#39;m just too young to see long-term real estate trends, but it feels to me like I&#39;ll never be able to afford property in this city.
Reply
Lily Dustbin / July 27, 2007 at 07:08 am
user-pic
<p>I wonder if the continued addition of condos to the cityscape is actually driving up the cost and desirability of houses? In Vancouver it&#39;s not unheard of to hear of houses going for a million and I heard on CBC this week that the average selling price in NYC is $1.3 million (if scoring an apartment in Manhattan requires one to learn a new language and acquire a secret decoder ring, imagine what a bidding war would be like?). At least Toronto can keep building up and out to keep prices relatively in check if that&#39;s the goal.<br /> </p><p>I agree with John that the real estate business is in desperate need of an overhaul. Look at the cheesy, formula print advertising&nbsp; and their utter lack of doing anything remotely interesting online. Talk about missed opportunities... </p>
Reply
The Beerad / July 27, 2007 at 09:56 am
user-pic
<p>Lily,</p><p>&nbsp;I think you&#39;re right.&nbsp; In Van there&#39;s a huge gap between carrying the cost of a house and carrying the cost of a condo.</p><p>&nbsp;We started looking at condos, but once you add the condo fees on to the mortgage payment, a condo isn&#39;t necessarily more affordable than a modest town in T-Bellwoods, Corktown or Riverdale.&nbsp;</p>
Reply
Ben / July 27, 2007 at 09:59 am
user-pic
So people are consistently paying more than the asking price, and still the councillors wimped out on the land transfer tax?&nbsp; It seems like people would have no problem covering it.
Reply
lol / July 27, 2007 at 02:21 pm
user-pic
<p>so more people are buying homes and paying more for houses.. shouldn&#39;t the property tax collected in the last couple of years have gone up... a lot? and the city still in debt? this doesn&#39;t make any sense at all, unless the city has been wasting our money....</p><p>btw, I am wondering if the buyer of that property paid cash... </p>
Reply
Kendrew Leung / July 29, 2007 at 11:55 pm
user-pic
And here I am waiting for the housing bubble to pop... :D and then it'll be my turn to buy ;)
Reply
Chico Sanchez / July 30, 2007 at 11:04 pm
user-pic
People are always comparing Toronto to New York or London in terms of affordability, except many fail to recognize that the median incomes in these cities are far higher than Toronto.
Reply
The Beerad / July 31, 2007 at 08:26 am
user-pic
<p>Kendrew, personally I&#39;m waiting for gas to go back down to $0.55/litre until I fill up my car.&nbsp; I think the gasoline market has been in a bubble since 1993, it&#39;s bound to crash any day.</p><p>Mr. Sanchez, even adjusting for lower wages Toronto&#39;s housing is much more affordable than other world cities: <a href="http://www.fcpp.org/main/publication_detail.php?PubID=1654";>http://www.fcpp.org/main/publication_detail.php?PubID=1654<;/a></p>
Reply
Chico Sanchez / July 31, 2007 at 12:32 pm
user-pic
The Beerad: The figures for median home prices in the study are&nbsp;not reflective of the median home prices in Toronto....which around around $350K vs. the $295K.&nbsp;Secondly, if you look at median household incomes for Toronto you see&nbsp;that it has declined in real terms(inflation adjusted)....if you compare 2001 data from StatsCan.&nbsp;A disconnect: Declining real median house hold incomes vs. significantly increasing home prices.
Reply
The Beerad / July 31, 2007 at 02:38 pm
user-pic
<p>Sanchez,</p><p>You&#39;re forgetting about the exchange rate (the study was done at Q3/06, when the CAD&nbsp; was about 84 cents to the USD).&nbsp; The C$350K you cite sounds about right,&nbsp;which is equiv. to US$295K given an 84 cent exchange.&nbsp; Toronto&#39;s housing prices would have to be another 50% higher to put us in Vancouver&#39;s league of (un)affordability, or another 80-100% higher to put us in NYC/SanFran/London territory.</p><p>Your point about static (or declining) real incomes and rising home prices is totally valid, and might be explained by the fact that, as above, the market was undervalued to begin with and still has a long way to go.</p>
Reply
Chico Sanchez / July 31, 2007 at 03:26 pm
user-pic
How is it undervalued when rents haven&#39;t moved much in the last 6 years? At most flat...when adjusted for inflation.
Reply
The Beerad / August 1, 2007 at 07:10 am
user-pic
<p>Sanchez,</p><p>&nbsp;I don&#39;t think we&#39;re getting anywhere.&nbsp; For every measure that suggests TO is undervalued, there&#39;s another that suggests that it is overvalued. This isn&#39;t the real estate boom in 1991 or the tech boom in 2000...it&#39;s just a market doing its thing. </p>
Reply
Chico Sanchez / August 1, 2007 at 12:26 pm
user-pic
<p>The Beerad: Are you an agent? </p><p>I have a hard time believing statements that are open ended such as &#39;it was undervalued&#39; . Compared to what? By what measure? No one is comparing it to 1991 or the tech boom. Let&#39;s get down to fundamentals.</p>
Reply
The Beerad / August 1, 2007 at 01:22 pm
user-pic
<p>Sanchez, I&#39;m not an agent or in real estate in any way, but I am financially literate.</p><p>You original comment suggested that real estate is more affordable in other big world cities than in Toronto, when adjusting for higher incomes.&nbsp; Doing some research, we find it&#39;s the opposite.</p><p>My statement wasn&#39;t open ended&nbsp;or absolute.&nbsp; No one measure of value is going to give you a completely&nbsp;accurate picture.&nbsp; Using the method you suggested in the first place, you would have to conclude Toronto is undervalued, as opposed to overvalued.</p><p>...which is moot anyway, because for every method&nbsp;that suggests TO is undervalued, there&#39;s another which suggests the inverse.</p><p>I can&#39;t beleive I&#39;m arguing with someone on the internet.&nbsp; Beerad out.</p>
Reply

Add a Comment
Other Cities: Montreal